Texas Housing 2020 in review and what’s ahead in 2021
Nearly 393,000 homes were sold in Texas during 2020, a near double-digit percentage increase from 2019.
While homeowners were cautious about listing their homes on the market and hosting in-person showings, the number of homes for sale dropped to record lows.
Texas’ total months of inventory (MOI) dropped to 1.7 months. A total MOI of around 6 months is generally considered a balanced housing market.
Nevertheless, home buying demand accelerated during the summer, fall, and winter for those less affected by the pandemic as remote-work-and-school spaces prompted the desire for additional space in the house, interest rates continued to fall, and a record number of millennials entered the housing market.
New home builders are part of the solution. In response to supply shortages, developers accelerated activity at the earliest stage of the construction cycle. Strong lot development accelerated 8.8% statewide while single-family permits grew 21.9 percent.
The same factors that defined 2020 will remain relevant in the new year.
The Texas Real Estate Research Center expects single-family sales to increase 8.4 percent in 2021 characterized by strong demand yet constrained inventory and substantial price growth.